Stellantis, a global automaker with its North American headquarters in Auburn Hills, today announced it has entered into a memorandum of understanding with LG Energy Solutions to form a joint venture to produce battery cells and modules in North America.
As a result of the joint venture, the companies will establish a new battery manufacturing facility that will help meet Stellantis’ goal of converting 40 percent of its U.S. sales to electrified vehicles by 2030. The plant is expected to start by the first quarter of 2024 and will have an annual production capacity of 40 gigawatt hours.
The location of the facility is currently under review and further details will be shared at a later date. The groundbreaking is expected to take place in the second quarter of 2022.
“Today’s announcement is further proof that we are deploying our aggressive electrification road map and are following through on the commitments we made during our EV Day event in July,” says Carlos Tavares, CEO of Stellantis.
“With this, we have now determined the next ‘gigafactory’ coming to the Stellantis portfolio to help us achieve a total minimum of 260 gigawatt hours of capacity by 2030. I want to warmly thank each person involved in this strategic project. Together, we will lead the industry with benchmark efficiencies and deliver electrified vehicles that ignite passion.”
The batteries produced at the facility will be supplied to Stellantis assembly plants throughout the U.S., Canada, and Mexico for installation in next-generation electric vehicles ranging from plug-in hybrids to full battery electric vehicles sold under the Stellantis family of brands.
The partnership between the Seoul, South Korea-based company and Stellantis began in 2014 when LG Energy Solutions (then LG Chem) was selected to supply the lithium-ion battery pack system and controls for the Chrysler Pacifica Hybrid.
“Establishing a joint venture with Stellantis will be a monumental milestone in our long-standing partnership,” says Jong-hyun Kim, president and CEO of LG Energy Solution. “LGES will position itself as a provider of battery solutions to our prospective customers in the region by utilizing our collective, unique technical skills and mass-producing capabilities.”
Stellantis plans to invest more than $34 billion through 2025 in electrification and software development, while targeting to continue to be 30 percent more efficient than the industry with respect to total Capex and R&D spend versus revenues.
The transaction is subject to agreement of definitive documentation and customary closing conditions, including regulatory approvals.